Brussels, 22/03/2004 (Agence Europe) - Permanent Representatives from Member States reached an agreement on the "investment services" directive, which could get the European Parliament's green light at next week's plenary session and by that of the Council in May. Based on a presidency proposal, permanent representatives defined a compromise on the main point still pending: transparency of prices set by banks for individual share sales. EP rapporteur (British Conservative) Theresa Villiers, announced that she would be willing to agree to this compromise negotiated informally between the institutions, although it was a "disappointment".
The key to the financial services action plan is the "investment services" directive for introducing competition onto the stock markets and into financial institutions by allowing the latter to perform direct sales to their customers. Until now, France, Italy, Spain and Belgium have not authorised these "internalised" sales outside of the stock exchanges. In order to obtain agreement from France and Italy, the latter demanded that financial institutions were obliged to make their quotations public before sales and to stick to the price agreed upon.
In October, the Council reached an agreement on this basis, in opposition to the United Kingdom, Ireland, Luxembourg, Sweden and Finland (EUROPE 8 October p 9). The economic committee of the EP also rejected this agreement by adopting the report of Theresa Villiers in February by 26 votes for and 8 against, thanks to the votes from the Liberals and some of the EPP-ED group (EUROPE 25 February p 11).
Coreper has so far limited the obligation of price transparency to individual sales of shares when their volume is less that the "standard" market size, as requested by the EP. It will be up to the European Commission and the European Regulators Committee to explain the definition during adoption of secondary legislation. These obligations will affect all financial institutions that sell shares in an "organised, frequent and systematic way". It will only be possible to adjust prices when professional investors are involved.
Parliament rapporteur, British Conservative, Theresa Villiers, explained that this compromise could be approved by the European Commission on 30 March, which would put an end to one of the toughest battles experienced by this parliament. According to Villiers, this compromise is the "least worst", given the political context. The Liberals spokesperson at the economic committee, Chris Hume from Britain also welcomed the compromise declaring in a press statement that although it did not go as far as he would have wished, there was no doubt that it would be a major advance if the Commission agreed to apply it liberally.